Is it mandatory for NRIs to obtain PAN?
PAN is a unique 10-digit alphanumeric identification number issued by the Income-tax department to the taxpayers.
It is mandatory for every NRI to obtain PAN:
- if he has taxable income; or
- if his sales or revenue from business or profession is likely to exceed INR 500,000 in a financial year; or
- if he is the Managing Director, Director, Partner, Trustee, Author, Founder, Chief Executive Officer, Principal Officer
- if he is entitled to receive any income which is subject to TDS or TCS in any financial year
- if he intends to enter the following transactions:
|Nature of Transactions||Transactions Value|
|Sale or purchase of Motor Vehicle (except two wheeler)||All Transactions|
|Opening a Bank account and a demat account||All Transactions |
|Application for credit or debit card||All Transactions |
|Payment to Mutual Funds||Exceeds INR 50,000|
|Deposits – Banks, Co-operative Banks||Exceeds INR 50,000 (one day)|
|Terms Deposit – Banks, Post Office, NBFC||Exceeds INR 50,000 (single) or INR 500,000 (in total)|
|LIC Premium||Exceeds INR 50,000|
|Sale or Purchase of shares of a Private Limited Company||Exceeds INR 100,000|
|Sale or Purchase of any immovable Property||Exceeds INR 100,000|
There may be certain situations wherein a NRI is unable to quote his PAN in the specified transactions as referred to in above table since he does not have taxable income in India. In such situation, he can make a declaration in Form 60 with particulars of such transaction.
Penalty consequences relating to PAN:
- INR 10,000 for failure to obtain PAN;
- INR 10,000 for applying for another PAN when already in possession of a PAN;
- INR 10,000 for failure to quote PAN.